If enacted, the PUC's recommendations would allow some consumers to shop around for the best electric rates within five years, perhaps as early as the turn of the century.

The PUC report, two years in the making, likely will carry more weight than the typical bureaucratic document. It's expected to in part shape Gov. Tom Ridge's position on the issue. Ridge, who has said he favors increasing competition, didn't until yesterday take a firm stand on so-called "retail wheeling" -- a policy by which customers can purchase electricity from any of a number of utilities.

"If electric competition is implemented thoughtfully and with the right approach, we all stand to benefit," the governor said yesterday." ... For too long, Pennsylvania has been burdened by significantly higher utility rates than the national average."

Pennsylvania ranks 13th among states in the cost of electric prices, with consumers spending $1.5 billion annually more than the national average. If the PUC plan was fully implemented today, residential customers would expect that their next monthly electric bills to be reduced by 8 percent to 35 percent, said Commission John Hanger.

The state's existing regulatory system, Hanger said, "rewards inadequately those utilities that achieve reliable service and comparatively lower rates and rewards too generously those utilities that have burdened their rate payers with some of the highest rates in the country."

Retail wheeling is likened to changes made to the long-distance phone industry. For example, a Metropolitan Edison Co. customer could decide to buy electricity from Pennsylvania Power & Light Co. Under the plan, Met Ed would continue to claim a monopoly on the lines through which power is transmitted, and customers would be required to pay a small fee to use the network.

Legislation is required for the gradual phase-in of deregulation to begin. Under the plan, consumer choice would be offered to 10 percent of a utility's peak-load customers by the year 2001. And all Pennsylvania electric customers, will be able to choose their power provider by 2005.

The state House and Senate are considering separate pieces of legislation that would put in place the principle of competition. The PUC report echoes many of the key components of the bills.

Some customers might not have to wait years before having electric options, however. Commissioners said smaller pilot programs, entered into by utilities on a voluntary basis and offered to just 5 percent of rate payers, could begin as early as April.

"It's a great step forward and it bodes well for the legislation," Rep. T.J. Rooney, D-Northampton, said of the recommendations. Rooney, an outspoken supporter of retail wheeling, added, "The bottom line is that this will help the consumers."

Five other states, including neighboring New York, have started retail wheeling rolling and plan to have the concept fully implemented in several years.

Issuance of the report capped a two-year investigation by the PUC into electric competition. The commission voted unanimously to present the report to Ridge and the Legislature.

The report recommends that utilities be allowed to continue recouping what are known as "stranded costs." Capital investments, including the cost of building nuclear power plants, would still be passed on to customers through rates or surcharges under the plan.

Though she voted in favor of the report, Lisa Crutchfield was the only commissioner to find fault with several of its key points.

"I do not believe there is conclusive evidence that customer choice is going to provide lower rates," said Crutchfield. "Competition in the retail market is not a panacea."

Additionally, Crutchfield said deregulation efforts would require a 10-year phase-in period, twice as long as the PUC report suggests.